Newspapers hit by softer ad climate

RussBritt

NEW YORK (CBS.MW) - Shares of Dow Jones & Co. and Knight-Ridder Inc. slipped Wednesday as investors reacted to the two newspaper-publishing companies' reports of weaker advertising revenue.

Dow Jones,
DJ
publisher of The Wall Street Journal, saw its stock fall $4.38 to $56.97 after the company warned investors it would fall short of the consensus estimate for its first-quarter profit. Advertising linage at the Journal was down 32.1 percent in February, compared with a 42.1 percent increase the corresponding period a year ago. See full story.

A poor advertising climate also is likely to mean layoffs at Knight-Ridder
KRI, -0.23%
company officials said this week. Markedly softer revenue from employment advertisements at the company's San Jose Mercury News and the Philadelphia Inquirer are contributing to difficulties at the two papers, company officials said. Knight-Ridder shares fell $1.45 to $58.95.

The struggles at those two papers seemed to have a ripple effect elsewhere. The New York Times Co.
NYT, +2.20%
dropped $1.10 to $41.78 while Washington Post Co.
WPO
was down 19 cents to $622.01.

Meanwhile, other major media stocks were mixed. Walt Disney
DIS, +0.56%
rose 25 cents to $29.98 after Lehman Bros. initiated coverage of the company with a "buy" recommendation.

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